If you were hoping to legally wager on sporting events anywhere in South Dakota this year, your hope should keep springing eternal. The recent rejection of bill HB 1213 means no statewide sports betting for Iowa’s northwest neighbor in the near future.
In fact, the leaders in Pierre favored a very literal and narrow reading of South Dakota’s newest constitutional amendment, which maintains sports betting only in Deadwood proper.
Latest on South Dakota online sports betting
Sports betting is technically legal within the city of Deadwood since South Dakota voters approved a constitutional amendment in November. However, all that amendment did was authorize the SD Legislature to move forward on regulating the activity.
The language of the amendment takes no significant action on the matter; thus, SD legislators are busy drafting rules now. Among the many issues, they have to decide whether to allow online betting and, if so, to what extent.
Currently, it looks to be minimal, if at all. Earlier this month, the SD House State Affairs Committee voted down HB 1211. That bill didn’t deal with online betting explicitly. The defeat of the bill and comments about it are telling, however.
Bill HB 1211 would have allowed any business with a liquor license to install betting kiosks. The retailers would have had to connect those kiosks to a Deadwood casino. Essentially, the bill set the kiosks as an extension of the betting windows at those casinos.
The committee voted down the bill 9-4. Reps. Tim Goodwin and Oren Lesmeister spoke for the majority on the issue.
“We’re going against what the public wanted when they voted for this,” Goodwin said.
“If we want this statewide, we need to take this back to the voters,” Lesmeister added.
That signals similar resistance to a landscape that allows South Dakotans to wager on their phones anywhere in the state. In fact, a bill that defines legal wagers as only those which are made in-person at a Deadwood casino has already progressed.
Bettors in SD will be confined to Deadwood sportsbooks
Bill SB 44, which the South Dakota Senate has already approved, is on its way to the same committee. That bill explicitly restricts legal sportsbooks to retail operations at Deadwood casinos only. There’s zero room for any online wagering within the bill’s parameters.
It’s uncertain whether the committee members are completely on board with all of SB 44’s tenets. There will likely be little resistance on the point of limiting betting in this way, though. That means if legal online wagering is ever to take place, it will happen because of further legislation.
One possibility is the “Mississippi model.” There, online betting is technically legal but only on casino grounds. There isn’t much incentive for operators to build out online systems within that framework. Thus, there aren’t any online sportsbooks operating in the Magnolia State.
Another option for a compromise is how online wagering works in Rhode Island. There, bettors can bet anywhere in the state. The sportsbooks comply with that state’s law because the servers they run on are at retail casinos. That could satisfy the location requirement in South Dakota as well.
That could test the state’s interpretation of its own law, just as it did in Rhode Island. If legal sports betting in South Dakota remains confined to Deadwood casinos and over-the-counter or kiosk betting at those properties only, that’s good news for sportsbooks in Iowa.
Why Iowa sportsbooks are behind SB 44 all the way
It’s a pretty simple situation for Iowa sportsbooks: If South Dakotans must be in Deadwood to wager legally, they may find it more convenient to cross the border to bet with an Iowa online sportsbook.
It isn’t clear how often out-of-state bettors are coming into Iowa. The longer IA sportsbooks avoid serious competition besides Illinois, the more they can enjoy the benefits. SB 44 becoming law would ensure that’s the case for the foreseeable future.
Without a competitive, statewide South Dakota online sports betting industry, Deadwood casinos will continue to control gambling in the state. Without that same activity, Iowa will also enjoy collecting tax dollars from SD residents.
